The utilization of insolvency assets according to Bulgarian insolvency law
The utilization of insolvency estate is ordered by the court with the order declaring the insolvency of the company. The insolvency administrator is responsible for the utilization. All real estate, objects, rights in rem and other rights that are part of the insolvency estate are to be transformed into money.
On demand of the insolvency administrator and according to a resolution of the creditor’s meeting, the insolvency court allows an auction. Article 717 of the Commercial Act determines which persons are not allowed to participate in the auction.
Usually, the utilization is performed in the form of a sale of all the assets. Normally, the first auction is not accessible to the public. If the first auction that has not been accessible to the public has not been successful, a second auction – accessible to the public and with a lower opening bid – is to be performed. In case that the second auction is not successful neither, a third auction takes place; accessible to the public and with an even lower opening bid.
If the third auction is unsuccessful too, the insolvency administrator must initiate direct sales negotiations with potential purchasers. The direct sale follows the order of the court. Only then, the objects of the insolvency estate may be sold. The purchaser becomes the new owner if the insolvency creditor has been owner of the sold object or real estate.